When the CEO wants to cheat on taxes

In The Workplace

By Rey Elbo

I’m the accounting manager at a medium-sized corporation engaged in food manufacturing. It’s about my new boss and the CEO of our company who wants me to shave something out of our gross income so that we’ll pay the lowest possible tax to the government and put up a bigger net profit. I’m afraid of losing my job of 25 years. I’m too old to seek employment elsewhere. What can I do? — In a Dilemma.

We owe it to ourselves to succeed. After that, everything we owe to the national internal revenue agency. Really, it’s an ethical issue that will depend on your personal values as there are ethical issues that can be described at times as exceedingly complex, when you must consider a bigger context, like the possible closure of your organization and dismissal of people as a result of tax cases that may be filed later on.

This is not to mention the possibility of the company officials being dragged into a legal controversy.

Managerial ethics are difficult to define in an exact manner. However, it can be best understood when compared with the requirements of the law and the individual’s free choice as reflected in our own personal values.

In your situation, tax evasion is illegal per se. However, if you don’t follow the instructions of the CEO, you may be in for bigger trouble. Your boss may put you in hot water or put you in the freezer for some time where you can do nothing.

Of course, you can retaliate by filing a labor case. Now, if that happens you may prepare for a bigger battle more than you can imagine. On the other hand, the CEO and the organization are aware of the possibility that you may use the illegal request as a defense and may withhold their fire.

Instead, it may offer you a handsome separation package, should you wish to resign sand save yourself the trouble.

Many ethical cases involve a conflict between one’s personal values and the organization, if not the organization versus society and the government as a whole. Which one should prevail — your individual concerns or the organization’s objective of profitability, in general?

One recent ethical test case is the infamous vaccine that has been in the news in our jurisdiction. In this case, should this kind of vaccine which has not yet been approved by medical authorities and drug administrators in its home country be allowed for export to other countries like the Philippines where the standards are sometimes much lower, and not as stringent as those found in First World countries?

Ethical decisions entail real conflict between your individual self and that of the organization and other employees. And so, it’s really up to you to decide on your situation. But before you make your final and firm decision, try to explore answering the following questions:

1. Would you consider sending a whistle-blower’s letter to the Board of Directors as a dangerous idea? Yes or no. Explore.

2. Are you the only one who knows about the CEO’s illegal request? If no, what are the other peoples’ positions? Are they supporting the CEO?

3. Would you like to be transferred to another work function or department to avoid performing the task? What are the chances?

4. Would your deputy agree on the same kind of arrangement, if ever you decide to move on to other opportunities elsewhere?

5. Have you exhausted all possible means and make recommendations to the CEO certain allowable tax avoidance options that may be legally acceptable?

6. What’s the chance that your management would put you in a difficult situation by charging you with every imaginable offenses against the company?

7. Last, how about early retirement? You may be able to get sizeable separation benefits.

Managers and their CEOs engage in unethical behavior for many, varied reasons. These include greed, ego, and pressure from the Board of Directors purposely to increase profits or appear successful to people and other organizations. However, it is only managers like you who carry the tremendous responsibility for setting the ethical climate in your organization. You must be the first one to act as a role model for ethical behavior, even if others can’t do it.